Growing fears that economic issues plaguing nations across Asia and Europe could affect US stock markets too have been compounded by the growing crisis over stalemate conditions in Brexit negotiations. The effects of an inconclusive Brexit deal can have disastrous effects on the rest of the world somewhat lesser than the UK which would plunge into recession. This kind of situation could have disastrous effects on the world as a whole as two of the world largest economies that are at positions 3 and 4 namely Germany and Japan are already shrinking while China is struggling against slowdown and if UK which is at No.5 joins the bandwagon then it could start another financial crisis.
Though United States is growing at a steady pace this crisis could also affect its pace and it could decelerate in 2019. Brexit deal crisis were felt sharply when UK PM Theresa May was unable to get the consent of all her party colleagues for the draft Brexit deal prepared by her. The resignation of several top members of parliament brought out fears of a midterm election in the country and sent both national currency and share markets tumbling southwards.
While the British pound fell by 2 percent, shares of large banks like Royal Bank of Scotland fell by 14 % while Baclay’s fell by 8 %. Investors on Wall Street are already worried about this current situation in Britain as a recent volatility bout had caused the S &P 500 to fall by 7 % after hitting a high in September. Besides the looming Brexit crisis, crash in oil prices, US, China trade War and impact of high federal taxes investors are worried about slowdown in corporate profits and share prices of recognizable brands like Amazon, Facebook, General Electric and Apple. US dollar has also become stronger and has risen sharply by 5 % against several currencies that has made its exports expensive for people from other countries.